Rate cuts are turning the spotlight on notice periods for Notice Accounts

Savers need to take more notice of the notice periods on Notice Accounts if they want to ensure they are still earning a competitive rate particularly if rates start to fall further, Investec Save says.

Currently notice accounts - which pay a higher rate than instant access in return for giving notice before making withdrawals – offer some of the highest rates¹ in the savings market compared with instant access accounts and fixed rate bonds.

New analysis² from Investec Save shows just one in three of the 90, 95 and 100-day notice accounts available give an additional 14 days on top of the notice period before rates are cut allowing savers to switch their money for a better deal if they want. The analysis for Investec Save by Andrew Hagger of Moneycomms found 10 out of 30 accounts offer 14 days extra notice before the cut comes into effect with one giving seven additional days’ notice.

Another 11 accounts offer just 14 days’ notice in total before cutting rates although they allow customers to shut accounts without charge after 30 days. A further seven accounts give a range of notice periods before a rate cut comes into effect from 14 days to 95 days and one account has no fixed notice period but does allow customers to switch without charge during its notice period.

Notice accounts have become increasingly popular, research³ for Investec Save shows around 10% of savers increased the money they had in notice accounts ahead of the Bank of England base rate cut and 11% plan to do so now that the Bank of England has cut the base rate.

David Hunt, Head of Retail Savings at Investec Save, said: “The rates available on the top-paying Notice Accounts are higher than those on the best instant access and fixed rate accounts so understandably more savers are making use of them in addition to instant access and fixed rate bonds.

“Savers however need to be sure before putting money into Notice Accounts that they can move  money when they want and have control of their cash.

“That will be particularly important if base rates are reduced further, and providers need to cut the rates they offer in response. As always savers should look beyond the headline rate on an account and that includes those which rely on bonuses to boost headline rates.”

Investec Save’s 90-Day Notice Saver gives savers at least 104 days’ notice before reducing the interest rate on the account. In the event of a rate decrease, this gives consumers enough time to make a change if they wish ensuring that they are in control. It also offers unlimited deposits with withdrawals subject to a 90-day notice period.

Investec Save offers a range of accounts, which do not have any penalty fees or hidden bonus rates, including its Online Flexi Saver and Fixed Rate Saver offering 1-Year, 2-Year or 3-Year terms.  The Online Flexi Saver is a simple and secure instant access savings account, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account.

The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity on the 1-Year and annually on the 2-Year and 3-Year. No withdrawals are permitted until the end of the term, and no further deposits can be made after the first seven days. 

¹ Compare The Best Savings Accounts UK | Rates Up To 10.38% (moneyfactscompare.co.uk)^.
2 Investec Save commissioned MoneyComms to conduct the research, which was completed on June 21st, 2024.
³ Investec Save commissioned Viewsbank to survey 1,106 adults aged 18-plus between June 21st and 24th 2024. The sample represented the demographic profile of the UK. Some 82% or 902 people surveyed said they have one or more savings accounts.
^* AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. The AER is intended to be an indicative rate to help you compare the return on different savings products.